Q & A "Texas Hold'Em" Poker

Q&A

“TEXAS HOLD’EM” POKER

1.Q.What is “Texas Hold’em” Poker?

A.Texas Hold’em (also known as “hold 'em” or “holdem”) is a variant of poker and is one of the most popular card poker games. It is also the most popular poker variant currently played in most casinos in the United States.

Although it can theoretically be played by up to twenty-two (22) persons, it is generally played by between two (2) and ten (10) persons.

2.Q. What is the objective of Texas Hold’em poker?

A. Like most variants of poker, the objective of Texas Hold’em is to win pots, where a pot is the sum of the money bet by the participants in a hand.A pot is won either at “the showdown” by forming the best five (5)-card poker hand out of the seven (7) cards available, or by betting to cause other players to fold and abandon their claim to the pot.

3.Q.Is gambling on licensed premises permissible in Pennsylvania?

A. Section 5.32(f)(2) of the Board’s Regulations [40 Pa. Code § 5.32(f)(2)] states that there may not be unlawful gambling directly or indirectly associated with any activity on the licensed premises. If there is, the licensee will be held strictly liable for such activity. Because unlawful gambling is a violation of the Pennsylvania Crimes Code, the Office of Chief Counsel cannot provide you with a legal opinion regarding whether any proposed Texas Hold’em games constitute unlawful gambling. [18 Pa. C.S. § 5513].Be aware that unlawful gambling consists of the following elements: consideration (i.e., an entry fee or charge to play), an element of chance, and a reward or prize. Pennsylvania Liquor Control Bd. v. PPC Circus Bar, Inc., 96 Pa. Cmwlth. 115, 506 A.2d 521 (1986). The Pennsylvania Commonwealth Court has held that poker playing for money on a licensed premises is gambling, within the definition cited above. Pennsylvania Liquor Control Bd. v. Kehler, 114 Pa. Cmwlth. 310, 538 A.2d 979 (1988). The local police, the Pennsylvania State Police, or the county district attorney may be able to provide an official opinion concerning whether what you have proposed constitutes unlawful gambling.

4.Q. Is it legal to hold a Texas Hold’em event on licensed premises?

A. Even if the Texas Hold’em tournament does not violate gambling laws, the event must be self-sponsored by the licensee. [40 Pa. Code § 5.32]. Self-sponsored means paid for and carried out by the licensee. Further, the total value of prizes for any given event, tournament or contest may not exceed five hundred dollars ($500.00). The total value of all prizes awarded in any seven (7)-day period may not exceed five thousand dollars ($5,000.00). [40 Pa. Code § 5.32(f)(7)].Events, tournaments and contests on retail licensed premises are subject to the following rules: there may be no unlawful gambling directly or indirectly associated with the event, tournament or contest; there may be no consumption of alcohol by participants as part of the event, tournament or contest; the price of admission may not include a charge for or entitle the participant to receive an alcoholic beverage; and licensees must maintain records of the prizes and winners on the licensed premises for two (2) years following the event, tournament or contest.

5.Q.Is it permissible for a third party to host a Texas Hold’em tournament on licensed premises?

A. Section 5.32 of the Board’s Regulations [40 Pa. Code § 5.32] permits retail licensees, such as restaurants, to hold self-sponsored events, tournaments or contests on their licensed premises. [40 Pa. Code § 5.32(e)(5)]. Self-sponsored means paid for and carried out by the licensee. Thus, it would not be permissible for a third party to conduct such events, tournaments or contests unless the third party meets one of the exceptions that permit third parties to hold events, tournaments or contests on retail licensed premises, eg., charitable organizations.

6.Q. Is it permissible to host a Texas Hold’em event on an unlicensed (portion of the premises)?

A.If the activity in question is deemed unlawful gambling, no; otherwise, yes, it would be permissible to hold such an event on an unlicensed portion of the premises.[40 Pa. Code. § 5.32(e)].However, events held on an unlicensed portion of a premises that have an interior connection to a licensed business are prohibited unless the Board gives prior approval.Section 3.52 of the Board’s Regulations prohibits an inside passage or communication to or with any other business conducted by the licensee or other persons except as approved by the Board.[40 Pa. Code § 3.52].

7.Q.What prizes may be offered in regard to lawful Texas Hold’em events? Do there exist limitations for the prizes that may be awarded?

A. The total value of prizes for any given event, tournament or contest on retail licensed premises may not exceed five hundred dollars ($500.00). The total value of all prizes awarded in any seven (7)-day period may not exceed five thousand dollars ($5,000.00). [40 Pa. Code § 5.32(f)(7)]. Should any subsequent event grow out of a Texas Hold‘em event or tournament (i.e., second tournament on/off-premises) the subsequent event will have its prize values attributed to the first tournament for purposes of section 5.32. Additionally, licensees must maintain records of the prizes and winners on the licensed premises for two (2) years following the event, tournament or contest.

8.Q. Do subsequent prize offerings after an initial tournament, such as a trip to Las Vegas for continued play, count towards the prize limitations?

A. Yes, if an individual is required to compete in the licensed premises' tournament in order to successfully advance to the subsequent competition, the subsequent prizes must be included within the established limitations.

9.Q.May a licensee offer prizes for a Texas Hold’em event that have been donated by a third parties?

A. There is nothing in the Liquor Code or the Board’s Regulations that prohibits a licensee from awarding prizes that have been donated by individuals or entities that are not manufacturers of alcoholic beverages or other Board licensees, so long as the donation would not constitute “sponsorship” of the event. Section 13.51 of the Board’s Regulations [40 Pa. Code § 13.51] prohibits in-state and out-of-state manufacturers of alcoholic beverages from contributing, directly or indirectly, to another licensee or group of licensees of a different class anything of value by means of advertisements, contributions, sale of tickets, donations or by any device for any purpose.There is, however, an exception that permits licensees or manufacturers to give to licensees advertising novelties, such as pens, t-shirts or ballcaps, that have a wholesale value of fifteen dollars ($15.00) or less and bear advertising matter.These advertising novelties may be conditioned on a purchase of alcohol. [47 P.S. § 4-493(24); 40 Pa. Code § 13.52]

As long as the items donated by the third party were given to the licensee with the idea that it was for the licensee’s use as it wished, and there were no strings attached to any particular event or to the sale of alcoholic beverages, then use of the donated items as prizes for an event sponsored by the licensee would be permissible.

Once again, the total value of prizes for any given event, tournament or contest may not exceed five hundred dollars ($500.00). The total value of all prizes awarded in any seven (7)-day period may not exceed five thousand dollars ($5,000.00). [40 Pa. Code § 5.32(f)(7)].

10.Q. During what hours may a Texas Hold’em event be held on licensed premises?

A. An event, tournament or contest can be held only during the hours for sales of alcohol. For a restaurant or hotel liquor, or eating place malt beverage licensee, these hours are 7:00 a.m. until 2:00 a.m. the following day, Monday through Saturday. [47 P.S. § 4-406(2)]. Sunday hours are from 11:00 a.m. until 2:00 a.m., assuming that the licensee has obtained a Sunday sales permit.All patrons must vacate the premises by 2:30 a.m. [47 P.S. § 4-499]. However, if a licensee holds an extended hours food permit, the licensee may remain open between the hours of 2:00 a.m. and 7:00 a.m. for the purpose of selling food on any day. [47 P.S. § 4-499(b)]. Therefore, the event may not be held beyond 2:30 a.m. unless an establishment has received an extended hours food permit issued by the Board.Club licensees may sell alcohol daily between 7:00 a.m. and 3:00 a.m. the following day.

11.Q. What is the age requirement for Texas Hold’em events?

A. There is no age requirement for the game; however, minors (persons younger than twenty-one (21) years of age) may not be present on licensed premises unless they are permitted to be present under one of five (5) exceptions. These are as follows:

1) Minors with parents (“Parent exception”)

If a minor is with one or both of the minor’s parents, then the minor is permitted to be on the premises. The minor and parent(s) can sit anywhere on the premises, including the bar area, and alcoholic beverages can be served to the parent(s) or to any other adult with the minor.

2) Minors with legal guardians (“Guardian exception”)

If a minor is with a legal guardian, then the minor is permitted to be on the premises. The minor and the legal guardian can sit anywhere on the premises, including the bar area, and alcoholic beverages can be served to the guardian or to any other adult with the minor.

3) Minors under proper supervision (“Proper supervision exception”)

If a minor is under proper supervision, then the minor is permitted to be on the premises. Section 102 of the Liquor Code defines proper supervision as someone who is at least twenty-five (25) years of age, who is directly responsible for the care and conduct of the minor while on the premises, and who keeps the minor within his or her sight or hearing. Proper supervisors are generally unpaid volunteers. However, licensees or their employees are allowed to act as proper supervisors as long as they are not performing any other employment-related duties at the same time. [47 P.S. § 1-102].

If a minor is in the premises under proper supervision, the minor can sit anywhere on the premises, including the bar area, and alcoholic beverages can be served to any adults with the minor.

Proper supervisors can only supervise a limited number of minors. In Philadelphia, that number is five (5). In the rest of Pennsylvania, the number is twenty (20), i.e., one (1) proper supervisor can supervise up to twenty (20) minors. Notwithstanding the above limitations, if the minors are on the premises as part of a school-endorsed function, each proper supervisor can supervise up to fifty (50) minors.

4) Minors attending a social gathering (“Social gathering exception”)

If a minor is attending a social gathering, then the minor is permitted to be on the premises. A social gathering is an event marketed to or catering to minors, in whole or in part, for which at least forty-eight (48) hours advance notice has been given to the Pennsylvania State Police, Bureau of Liquor Control Enforcement (“Bureau”). No alcohol can be served to anyone, even adults, at a social gathering and all alcohol must be removed from or secured by lock and key at the licensed premises.

5) Minors at food-oriented establishments (“Pizza Hut exception”)

If a restaurant, hotel, or retail dispenser licensed premises has gross sales of food and non-alcoholic beverages equal to fifty percent (50%) or more of its combined gross sales of both food and alcoholic beverages, then minors are permitted on the premises. The presence of a parent, legal guardian, or proper supervisor is not necessary.

Minors present under the Pizza Hut exception are not permitted to sit in the bar section of the premises. Further, no alcoholic beverages can be served to any adult at the table or booth where the minor is seated (unless the minor is also there with a parent, legal guardian, or proper supervisor), without risk of citation by the Bureau for having minors frequent the premises.

If the minors are permitted on licensed premises subject to one of the exceptions above, there is nothing in the liquor laws prohibiting their participation in the tournament.

Even if the minor is lawfully on licensed premises under one of the above exceptions, a retail licensee has the authority to do such things as ban minors from certain areas of the premises, such as the bar area, require minors to leave by a certain time, or even ban minors from the premises altogether. As long as the licensee’s actions are not based upon illegally discriminatory reasons, it may prohibit minors from entering its premises in whatever manner it wishes.

12.Q. Are non-members of a licensed club (VFW, Elks, sportsmen’s club, etc.) who attend a specific event permitted to play Texas Hold’em poker?

A. There is nothing in the Liquor Code or Board Regulations that could limit participation to members only.Limiting participation in the proposed tournament to members and eligible guests would be evaluated in accordance with the club’s constitution and bylaws. Section 5.81 of the Board's Regulations requires that a club licensee adhere to the provisions of its constitution and bylaws. [40 Pa. Code § 5.81]. Therefore, if limiting participation in the proposed tournament to members and eligible guests would be required under the club’s constitution and bylaws, the club must enforce that limitation.

13.Q. Does Texas Hold’em qualify as a “small game of chance?”

A. No, poker is not permitted under the Local Option Small Games of Chance law. The only "games of chance" which are permitted by law are punchboards, daily and weekly drawings, raffles and pull tabs.

The Pennsylvania Local Option Small Games of Chance Act (the Act), 10 P.S. §§ 311-327, was passed in 1988. The Act allows certain nonprofit organizations, known as “eligible organizations,” to conduct small games of chance for the purpose of raising funds for the promotion of “public interest purposes.” The Department of Revenue promulgated regulations pursuant to the Act that were adopted and appear at 61 Pa. Code § 901.1 etseq. These regulations along with all Pennsylvania Regulations are accessible on-line at www.PaCode.com. The Local Option Small Games of Chance Act is quite specific regarding the games of chance that are allowed and the manner in which they may be conducted. You should contact the Department of Revenue at (717) 787-8275 for more information about small games of chance.

14.Q. May I hold a “ladies’ night” for an event related to a Texas Hold’em event?

A. The Pennsylvania Human Relations Act prohibits discrimination on the basis of gender and/or sex. [43 P.S. § 951 etseq.]. It would be unlawful to offer only one (1) sex a benefit, such as charging a cover only to male patrons. Therefore, a ladies’ night promotion in which females received a benefit that is not also offered to men is not permissible unless both men and women receive the same benefit.

15.Q. Who may I contact for further information?

A. Your local police, county district attorney or the Pennsylvania State Police, all of whom are authorized to interpret the Crimes Code.